HL Deb 21 July 1983 vol 443 cc1311-22

7.13 p.m.

The Minister of State, Scottish Office (Lord Gray of Contin)

My Lords, I beg to move that the Local Government (Scotland) Act 1973 (Section 111) Amendment Order 1983 be approved. One of the difficulties about becoming a Member of your Lordships' House while a Government Minister is that one does not have the opportunity of selecting one's own occasion to make one's first remarks at your Dispatch Box. Devoted as I am to the cause of restraint where the spending of taxpayers' or ratepayers' money is concerned, I have to admit that the Local Government (Scotland) Act 1973 (Section 111) Amendment Order 1983 would not have been among the front runners were I to have chosen my own subject on this occasion. Nevertheless, I realise that it is an essential order and I am privileged to have the opportunity of asking your Lordships to approve it.

For the past 13 years I was in another place where I had the honour of representing the old constituency of Ross and Cromarty. That was terminated at the last election and I am now deeply aware of the privilege which has made it possible for me to continue to serve in your Lordships' House.

The title of this order describes its purpose, which is to amend Section 111 of the Local Government (Scotland) Act 1973. This section enables the Secretary of State to make regulations with respect to rates. I shall come to these powers presently. But your Lordships may find it helpful if I first of all describe briefly the powers under which the order itself is made. These are contained in Section 5(6) of the Local Government (Scotland) Act 1966. Subsection (6) is part of the measures introduced last year into Section 5 of the Local Government (Scotland) Act 1966 by Section 1 of Local Government and Planning (Scotland) Act 1982, and it provides that the Secretary of State may, by order, repeal or amend any enactment relating to the determination, levy or payment of a rate and where such is affected by a determination (or deemed determination) under section 5(4) (b)

An order made under subsection (6) has no effect until approved by resolution of each House of Parliament. If approved this order will amend primary legislation. The statute in question is Section 111(1) of the Local Government (Scotland) Act 1973 which enables the Secretary of State to make regulations with respect to rates. Under Section 108 of that Act rates are to be determined by local authorities only once a year in advance of each financial year. The Local Government (Miscellaneous Provisions) (Scotland) Act 1981 introduced a new provision into the 1973 Act (Section 108A(1)) which allowed a local authority to determine a lower rate than that determined under Section 108. The 1981 Act also amended the 1973 Act to allow the Secretary of State to make regulations as regards a lower rate determined under Section 108A(1) for the repayment of sums paid in respect of a rate determined under Section 108 and for the cost of levying and collecting the lower rate to be borne by the authority. This new provision became paragraph (f)of subsection (1) of Section 111.

No such provision was made by the Local Government and Planning (Scotland) Act 1982 with regard to a rate determined by an authority under Section 5 of the 1966 Act as amended by the 1982 Act and the purpose of this order is to make it clear and beyond doubt that the Secretary of State may with regard to a rate determined under Section 5(4)(b) make a regulation, under the new provision in Section 111 (f) with regard to the repayment of sums paid under Section 108 and to the cost of levying and collection to be borne by the authority concerned. This order is a minor technical paving step which will allow measures to be put into effect which Parliament have already approved in principle and to which specific approval will be sought in another place. I commend the order to the House.

Moved, That the Order laid before the House on 23rd June be approved.—(Lord Gray of Contin.)

7.19 p.m.

Lord Ross of Marnock

My Lords, it falls to me to greet the noble Lord after his maiden speech—a maiden speech at the Dispatch Box. I think it is the longest speech I have heard him make. I have known him for 13 years, and for a long time I remember him in the Scottish Grand Committee, when the 1973 Act to which he refers so dramatically and so tellingly, was going through the House. I remember how I used to look across and see him, and as soon as I saw the eyes glisten and him edging on his seat, I knew that he was about to get up and make his usual speech— I beg to move that the Question be now put. He was a Whip at that time; and now here he is, a living symbol of the defeat of his Government in Scotland. He was not the only Minister who was defeated in Scotland; and may I remind this crowded House that of the 72 seats in Scotland, Labour won 41, the Tories won—was it 21?—the Alliance won, I think, eight and the SDP two. So wherever the Government have a mandate, it is not in Scotland.

The noble Lord has become the successor of not one of the oldest offices in Scotland—in fact it has been in existence just over 32 years, the office of Minister of State for Scotland. But I should warn him that nine of the 10 holders are still in the House; and when you add to that four ex-Secretaries of State for Scotland and at least two former Under-Secretaries of State for Scotland, the noble Lord will realise just exactly what he has to put up with in terms of the experience that is around. He is not the first defeated Tory Minister who has found a comfortable and secure refuge in this House, so he has not broken any records. Nor yet is he the first to receive the consolation prize of being Minister of State for Scotland. I could name two who, having been defeated at a general election, suddenly appeared here as Ministers of State for Scotland; so he is following a tradition.

But let him not think that this is a dead-end job that he has. It is not the end of the political road—far from it. I remember Lady Tweedsmuir, who is the only one of the 10 who is no longer with us. She went on to shine at the Foreign and Commonwealth Office. Then there was the first of them all; he became Prime Minister. He was known in those days as Sir Alec Douglas Home. He was the first Minister of State for Scotland, and I am sorry that my old friend, the noble Lord, Lord Strathclyde, is not in his place, because he was one of the longest serving Ministers of State. Then there is the last man who has followed: he has been promoted to Northern Ireland. I refer to the noble Earl, Lord Mansfield. So let the noble Lord think of all these glittering prizes that are ahead of him. He has been the victim of his own Party's failure in Scotland. There may have been an element of redistribution in this, but I can assure him that the Member who formerly had Skye did not want to lose it. He regarded it as a good fall-back position for Liberals. I remember of course the man that he defeated, Alasdair Mackenzie—a very nice good Scotsman—and how he must have felt. There was no consolation prize for him in the shape of a seat in the House of Lords.

The new Minister brings to Scottish Affairs some Ministerial experience, and we are glad of that. He has some insight into the wayward ways and the mysterious ways of the Scottish Office, because he was a Scottish Whip for quite a time. There is no doubt that he has first-hand knowledge of Scotland's problems. No-one knows better than he the mood of Scotland at the present time. I sincerely hope that he will bring a sense of purpose to the Scottish Office, as we have known it over the years. I, too, have an advantage: he knows me and he knows what a reasonable man I am. He knows that I may sometimes be wrong (but I am always right!) and I look forward very, very much to seeing him handling Scottish affairs in this House. He will have a couple of tea boys occasionally. He will have the noble Lord, Lord Lyell; and, when he can free himself from the responsibilities of the Crown Office, the noble and learned Lord, Lord Mackay, will probably come in too to lend a hand. So the noble Lord need not worry. I think he will find this a very much friendlier place that the other Chamber and I hope that he does well.

I am very glad to welcome my noble friend Lord Strathclyde who is now in his seat. He will be glad to know that I gave him an honourable mention in his absence, but he can read about that in Hansard. I ask him, please do not write to me about it. The noble Lord, Lord Gray, said that this order is not the kind of thing he would have picked and that he might have picked something more important. But there cannot be anything more important than this. He finished by saying that this was just a little technical amendment. It is not, you know. I objected to the Government taking the power that it took in the 1981 Act, which it repeated in the 1982 Act—that Section 5(6) which gives the Secretary of State this power, which it is not to make regulations; it is the power to amend primary legislation. Those were the words that were used by Lord Ancram in another place when he mentioned this particular order.

Instead of bringing in primary legislation, the Government took the unusual power of amending by order. I objected to it at the time and I object now. I object even more, because he certainly wandered through all these statutes, though I am not absolutely sure that he is entirely familiar with all of them because he had pre-occupations elsewhere. But they all deal with the important business of local authorities and rates. There was a time under the 1966 Act when the local authority had a fair amount of freedom, and it is a freedom that is pretty basic to local authorities—the right to determine their own expenditure and to raise money to meet that expenditure. Take away that power, take that power to the central government, and local authority becomes meaningless from a democratic point of view.

What we have had since 1979 is decision after decision backed up by new Acts of Parliament which went through this House and which have extended the power of the Secretary of State in respect of local authorities. There was a power—I think it went back to 1929 and was consolidated within the 1969 Act, having been carried through all the various Acts—which gave the Government the right to reduce a grant if the expenditure of a local authority proved unreasonable and excessive. But he could not do that until he had proved it was unreasonable, after they had spent the money. Nobody ever applied that sanction to local authorities in all that time. Then the Government said that they were going to do it and they discovered of course that this was not good enough; so they decided to reduce the grant or any element of a grant purely and simply on the basis of what their estimated expenditure was going to be. Once you take a Government into the realm of determining the estimated expenditure and reducing a grant because they think it is excessive, that is a very serious matter. But the ratepayers were still penalised and the Treasury was that bit better off by the grant that was withheld.

So they started thinking again and said, "We will make them give the money back". They decided that they would take powers in the 1981 Act so that a local authority could reduce its rates in the middle of a year, after the usual time for fixing rates. Some of the local authorities did, and some of them did not. But then they discovered that they required still more power, which they took in the 1982 Act, under which the Secretary of State could determine exactly the amount of the reduction of the rate.

The report has to go through the House of Commons—it does not come to this House—and it is being dealt with here at the present time. There are four orders in respect of Glasgow, Stirling, Kirkcaldy and Lothian, and if they do not do what the Secretary of State wants within 26 days then it is deemed to have been done. I do not know what happens thereafter, but I suppose that if they do not put it into operation they are in default and can be charged by any individual ratepayer with illegally withholding a reduction of rates from him.

This is a serious matter, and it is what this order is about. Until this order is passed—it is an affirmative order, and it has already been passed by another place, but it has to be passed here—the Government cannot proceed with the regulations. Although they have certain power, they do not have power to make the regulations. My first question is: why on earth did the far-seeing Scottish Office civil servants and Ministers not see what had to be done? I cannot blame the noble Lord because he was not there, and if he had been there he would probably have seen it like a shot. The noble and learned Lord the Lord Advocate is a bit to blame here, too. He is the legal giant among them. They were his draftsmen who were drawing up this Bill. Why did they not see that what had to be done in 1981 would also have to be done in 1982 to cover the regulations, if they had to apply for a report and make a local authority reduce its rate poundage? It is a very serious matter.

Now this House is in a position where, if we vote against this order, it will be very difficult for the Secretary of State to proceed with his punitive expedition against Lothian, Stirling, Kirkcaldy and Glasgow. So the question is: is he justified in doing what he is doing? I do not suppose that the Government have finished yet. We shall probably have another local government Bill later this year. They will discover some further flaw, some noose that they have not tightened, and will make a further attempt to strangle local authorities.

We have a very intricate web which has been spun around local authorities and which is denying them the democratic freedom that people expect. They are forcing Glasgow to reduce their rates by 3p in the pound; in the case of Stirling it is 2p., as it is for Kirkcaldy; and in the case of Lothian it is 6p. I think that, in Glasgow, it is 19p per week which the average householder will get back. What they lose for that is something that will be determined. Libraries will probably not open on certain days of the week; there will be a slowing-up in dealing with planning applications; and other departments, such as recreation, will be affected—all because the Secretary of State has decided that, in his opinion, their expenditure is unreasonable and excessive.

Just before the general election there was a meeting with Glasgow Corporation and the Secretary of State discovered that he had made a mistake of £4 million out of £10 million. So instead of reducing the rates by 5p, he said that 3p would do. But what about all the other things that are there? We shall be opening in Glasgow—and I daresay that the noble Baroness, Lady Elliot, will be delighted because of her connection and her husband's connection—the Burrell Collection and the new art gallery. It is one of the finest in Britain. The Government want it open, and they paid half the cost of it. I was Secretary of State at the time when we came to the formula. Glasgow has an additional £1 million, and we can understand it, because they have to staff the gallery, heat it and maintain it. That is expenditure which is additional to last year's. Is that excessive and unreasonable? Or are they to open the museum on one day and close it the next because the Government say, "You are spending more than last year"? As a matter of fact, they are not spending very much more than last year, when this £4 million is extracted.

The Minister mentioned only Section 1 of the 1982 Act, which was an amendment of Section 5 of the 1966 Act, but the rest of that Act transferred responsibilities from regions to districts. Tourism now comes under Glasgow, which it did not last year. Recreation also comes under Glasgow, which it did not last year. Having transferred the functions, are the Government now to deny them the opportunity to raise the additional monies? This is crazy. In the last Session of Parliament we had a Mental Health Act. I remember the feeling of triumph in your Lordships' House when we got the Government to agree that there should be mandatory after-care attention for mental health patients. What is the use of loading new functions on to local authorities if the Government say, "If you are going to spend money on that, it is excessive and unreasonable"? This is the reality of life in local authorities today.

Of course, the rates are going up, but why are they going up? I ask your Lordships to ask the Chamber of Commerce in Glasgow why the rates are going up. They are going up because the Government are cutting their share of the cost. The noble Lord. Lord Lyell, is shaking his head. I will gladly sit down. We have three quarters of an hour.

Lord Lyell

It is less.

Lord Ross of Marnock

We have three-quarters of an hour. If the noble Lord wants to intervene and make a telling point, I shall be delighted to handle him and manhandle him after he has sat down again.

Lord Lyell

Order!

Lord Ross of Marnock

Five years ago the Government's share of reckonable expenditure—and it is the Government who fix that expenditure—was 68½ per cent, for the whole of Scotland. What is it today? It is 61 per cent. The local authorities meet the rest. How do they do that? Even though they are spending the same amount of money, if the Government cut down their share the rates automatically and inevitably go up. That is happening all over Scotland. The Government put out guidelines. There are 65 local authorities, and 62 of them are above the guidelines. But there are only four who are singled out for this penal attack by the Government.

There was another one—Shetlands. It was going to spend far more than Glasgow, Lothian or anywhere else, and then the Government met and said, "We will not take any action against the Shetlands". I think they were afraid that action might have been taken against oil in the Shetlands. Oil is a very big weapon indeed. Without giving any reason, certainly without making any comparison with other local authorities, the Government let Shetland off the hook. The rates will still go up in Shetland. But what about Glasgow? Glasgow's increased expenditure this year is lower than the average in Scotland. Its increased expenditure per head of population is lower than the average in Scotland.

A Question was asked on 30th June in the other place. The answer is illuminating. One of the things that the Secretary of State is concerned about is Glasgow's record. He was asked exactly how expenditure in Glasgow compares with expenditure five years ago. His answer was that expenditure on services in Glasgow, in constant terms, at November 1982 prices from 1979–80 to 1983–84 was as follows: in 1979–80 the amount spent by Glasgow on services was £82.27 million, while in 1983–84 this excessively extravagant local authority spent not £82.27 million but £82.92 million. Is this runaway expenditure? Of course it is not. There is a mistake in that figure of £4 million, which the Secretary of State admitted. This means that Glasgow is spending less.

The reason why the rates are going up is the Government's cut in rate support grant. This is crazy. Four reports have been published in respect of which these regulations will eventually be made. Shall we see those regulations when they are made? According to Section 111 the Government will have to consult the local authority associations. During the same period, Scottish Office expenditure went up by 12 per cent, while Glasgow's and Scottish local government expenditure went down. So the last people to come here and ask for regulations in order further to strangle these four local authorities are the Scottish Office.

In support of their case the Government are supposed by statute to pick out other local authorities with which to make comparisons. When one looks at the comparisons one finds that for the third time they are trying to hammer Stirling. The Government usually take four different local authorities for the purpose of comparison. They are on their tenth one with Stirling. They change their comparisons every year. It is the old rate support grant argument. You start at the end; then you find your comparisons afterwards so that you get the result you want. If I asked the noble Baroness, Lady Elliot of Harwood, to compare similar local authorities with the district of Glasgow, which is the biggest local authority district in the whole of Scotland, would she say that it is right to compare Glasgow with Falkirk, Glasgow with Cumbernauld, Glasgow with Clydebank? Is there any just comparison relating to population, expenditure per head and services? It is crazy. We have moved away from rational thought in respect of local authority expenditure into the realms of fantasy, which arises purely from the whim of the Secretary of State.

I hope that the noble Lord, Lord Gray of Contin, realises the kind of morass he has stumbled into. This is not the last of our arguments; it is only the beginning of our arguments. The noble Lord knows how reasonable I am. If he were convinced that I am right—and I am sure he is—he would get up and say, "In view of the speech of the noble Lord, I shall withdraw this motion and consult the Secretary of State". A 2p reduction in Stirling, a 2p reduction in Kirkcaldy and then in Glasgow—all this is undermining the spirit of local government democracy in Scotland. That is what is at stake. If we go much further down this road, I do not know whom we shall get to serve local government. No self-respecting person will serve local government if he knows that every decision he makes will be supplanted by a direction from the Scottish Office.

How many people in the Scottish Office are now looking after local government in Scotland? I know how many people in local government have to go into the question of estimates, finance and the rest, but how many people are doing this in the Scottish Office? Or is it being done very crudely, with guidelines then being produced as holy writ? They are more like guile lines than guidelines because they do not mean anything in relation to the reality of local government. I hope that the House will not pass this order.

7.47 p.m.

Lord Mackie of Benshie

My Lords, I, too, would very much like to welcome the arrival of the noble Lord, Lord Gray of Contin, in this House. He may regard it as somewhat of a caesarean operation in that he was put in here perhaps prematurely. Nonetheless, he is extremely welcome. I am sure that the noble Lord will agree with me that he could not have been put out of the other place by a better party. In spite of all the "cracks" which have been made, the welcome is indeed sincere. We are sure that the noble Lord will do as good a job as his party will allow him to do.

I wholly agree with the noble Lord, Lord Ross of Marnock, though I shall take a little less time in which to do so. It is an unfortunate subject for the noble Lord to have to deal with first in this House. The way that the Secretary of State is going on about this matter is quite extraordinary. Local government in Scotland needed a great deal of reform. There is no question whatsoever about that. The party of the noble Lord, Lord Ross of Marnock, had done a great deal of harm to the reputation of local government. There were many anomalies. In the much quoted district of Glasgow, for example, the ratepayers were soaked at the expense of householders in municipal housing who had low rents and low rates and who, of course, continued to vote for the party which put them in this position.

The reforms have now been made. No longer are parties able to return to power by soaking one section of the community, which is what the Labour Party did for many years. Those reforms were right and proper. I do not know who is prompting the Scottish Office, or the Government. I do not know whether Scotland is being made an example, perhaps to be followed by England. However, the Government are now going to quite ridiculous lengths. Lothian is a case in point. Having got the conditions right and having made it quite clear that the locally elected councillors would have to sting their constituents if they wanted to carry on with excessive spending, the electorate got the message and removed the offending party from control of Lothian. That, I should have thought, was a right and proper thing to happen in a democracy, and the Government should have been quite pleased that it did happen.

It is much easier to keep one's expenditure down and much more difficult to reduce excessive expenditure, but nevertheless Lothian succeeded in cutting £53 million. They fixed a rate at 92p—not excessively above the average in view of Lothian's problems. One would have thought that democracy had been at work and that this was a reasonable thing for the Government to achieve.

Now the Government are actually listening to the local Tory Party, so far as I can gather—to the minority group—and are fixing the reduction at the level at which the local minority group Tory Party fixed it. They are not allowing any compromise. This is appalling. This is a complete negation of democracy. Here is a case where the Government appear to be acting—I do not know what. Is it out of spite? Is it out of offended pride? In Scotland we would say that the Government are being "bairnly"—and I will explain that word to the Hansard reporter afterwards, although I believe the noble Lords the Ministers on the Front Bench know exactly what I mean.

That is quite the wrong way for the Secretary of State to go about this. When one imposes arbitrary cuts on a local authority (and this has been proven time and again) and imposes them very quickly—and one does it in Government—that which is cut is the most easily-cut expenditure. They first take capital expenditure and cut that back. Then they take the sharp end. They do not try to cut administration. What they have done in Lothian is to cut the teachers and the home helps, and then try to save money on transport.

They have been reasonably successful in cutting expenditure, but expenditure has not been cut from those places where everyone wants it to be cut—from the excessive costs of administration. The noble Lord, Lord Ross of Marnock, was probably absolutely right when he said that the administration costs had been forced up by the Government's action. As a result, the Government are surely spoiling their own case: they are making it quite obvious to any decent, respectable and respected man that there is no point in going into local government.

If Central Office and the Treasury are going to check through every item of expenditure—which is obviously what is going to happen—what the devil is the point of having local democracy? It would be far better for the Secretary of State to appoint his commissar and let him run matters according to the rules of the Scottish Office. All this is really going too far. It is negating the good work which the Government have done up to now. I must say that I had hoped for better things from the Ministers of the Scottish Office.

If we continue in this manner, efficiency will fall lower and the best people will not be returning. One is far more likely to have a return to the kind of body which the Government are so much against. Think what a really "smart cookie" member of the sort of Government we might have if the Left-wing of the Labour party were elected to power could do with the powers now being handed to him on a plate. He could order the councils, conceivably, to double their rates and spread them about his favoured customers. It is a very bad order. The Government are going along a very dangerous road, and I must say that this order cannot meet with my approval.

7.54 p.m.

Lord Hughes

My Lords, having given way to the noble Lord, Lord Mackie of Benshie, who has made what was for him a long speech—because he does not usually speak for seven minutes—I shall have to cut short my remarks. Until my noble friend Lord Ross of Marnock had done his research, I had not realised how densely populated this House was by former Ministers of State for Scotland. In fact, if one looks at the attendance one might say that it is as some of our English colleagues would say, almost infested by former Scottish Ministers of State. But there are now two of us present—the noble Lord, Lord Strathclyde, and myself. I believe it would be appropriate for me also to extend a word of welcome to the noble Lord, Lord Gray of Contin.

If the noble Lord, Lord Gray of Contin, has a grievance against the electors of Ross and Cromarty, it has been added to tonight because he now knows the kind of thing which he has to face in this House. Every time he gets up to speak as Minister of State for Scotland he will be left in no doubt at all by my noble friend about the shortcomings of the Government in Scotland. Although my noble friend perhaps spoke longer than the noble Lord, Lord Mackie of Benshie, wanted him to speak, and probably spoke longer than I would have done, every word he said was absolutely true.

The noble Lord the Minister started by saying that this was not the subject that he would have chosen for his maiden speech. I can understand why he said that. He is a good Scot—we know that. It cannot come naturally for a good Scot that his first speech should need to make yet a further attack on local government in Scotland.

I have been long enough in public life to remember the election in Scotland when the Tories' slogan—a slogan with which they tried to gain seats in Scotland—was Town Hall knows better than Whitehall". That sentiment has been abandoned with a vengeance during the past few years. However well he may put the case forward—and the noble Lord will have this kind of thing to do yet again—I cannot believe that the heart of the new Minister of State for Scotland will endorse this kind of order. He has my sympathy; but I also welcome him to this House because in this Chamber we need all the Scots that we can lay our hands on.

Lord Gray of Contin

My Lords, might I first thank the noble Lords, Lord Ross of Marnock, Lord Mackie of Benshie and Lord Hughes, for their generous comments and their welcome. I can assure them that if they care to indulge in party political knockabout, I shall try not to be tempted to follow their example. But where they make criticisms of the Government then I shall certainly defend my Government in the knowledge that the steps which the Government are taking, and have taken over the last four years, are the only realistic steps which could have been taken in order to try to recreate in this country the kind of success which we have almost forgotten.

The noble Lord, Lord Ross of Marnock, asked why it was that this order was not made some time ago. The answer to that question is quite simple. It is that the Government, like any thinking Government, are reluctant to bring legislation before the House which is not absolutely necessary. Indeed, this order would not have been necessary had some local authorities in Scotland not obliged my right honourable friend to take action because he was satisfied that they planned to incur excessive and unreasonable expenditure.

I agree with the noble Lord that the circumstances which made this order necessary are regrettable. The Secretary of State, however, acted reasonably in not making the order until it was seen to be necessary. If local authorities had been as reasonable, then very likely the order would not have been required at all. That I give as my answer also to the noble Lord, Lord Hughes, who raised the same issue.

The noble Lord, Lord Ross of Marnock—and I congratulate him on having lost none of his powers of oratory since he came to this House from another place—said that I knew him and that I know him. That is very true, I do know him; and I can never forget him for his performances in another place. I know that his skills in debate reveal his technique for quoting and for giving reference to support his own arguments very skilfully indeed. We would almost have been misled by some of his remarks had we not done a little bit of research. He was suggesting that this Government was extremely ruthless with local government, insisting on defying local democracy and unnecessarily cutting back the amount local authorities had to spend. But of course the largest reduction in the rate support grant percentage was 4 per cent., and that was made during the period of government 1977–78 when the noble Lord, Lord Ross, was a member of the Cabinet.

Lord Ross of Marnock

No, the noble Lord had better get his facts right if he is going to continue without interruption from me. I left the Cabinet in 1976.

Lord Gray of Contin

My Lords, I apologise to the noble Lord; I of course was mistaken in that; but what I was not mistaken in was that the party of which he was a very loyal supporter formed the Government at that time. Indeed, the abatement in 1976–77 leading to a reduction in local authority expenditure was also associated with the party of which he was a loyal member. So we must get these things in perspective.

The noble Lord, Lord Ross, referred to the situation in Glasgow, and there was one comment which he made which I must put right. He referred to the alleged error, I want to clear up any misunderstanding which there may have been over errors which have been described in newspaper articles. All local authorities, as the noble Lord knows well, have to submit by the middle of March each year a form giving information about their budget for the following financial year. This form has to be certified as correct by the authority. Glasgow's form as submitted was, to put it at its best, confusing. It included a sum of £8 million for unallocated contingencies without any explanation.

In view of the size of the sum, the Scottish Office made inquiries of Glasgow. These revealed that the sum was an unallocated contingency which should have been shown elsewhere, and none of it taken into account as part of Glasgow's relevant expenditure for comparison against guidelines. Once the Scottish Office had established this, the £8 million was removed from Glasgow's figures for the purposes of guideline comparison and their guideline excess adjusted accordingly. The £8 million played no part in our consideration of Glasgow's expenditure for selective action. If there was any mistake, it was Glasgow's mistake for failing to present their figures properly.

The second error was over the £4 million included by Glasgow in its certified return on the line for housing improvement grants. This line is used by all other authorities and up to this year had been used by Glasgow itself only for the expenditure involved in administering housing improvement grants and loan charges, but not for the grants themselves. This year Glasgow decided to enter in this line expenditure on the grants themselves. It was bound to cause confusion if Glasgow chose without explanation to change its practice in providing information. The first time it was drawn to the attention of my right honourable friend was at a meeting which he held with representatives of the Convention of Scottish Local Authorities. The purpose of such meetings is of course to discuss local authority financial matters in general, not detailed points of this kind. Once again the term "error" is quite inappropriate.

Lord Ross of Marnock

My Lords, it is really not worth while giving way, I never mentioned the £8 million that the noble Lord spoke about. I do not know where he got his reply, but it was not related to my speech. I never mentioned it.

Lord Gray of Contin

My Lords, the noble Lord will be none the worse for the information even if he did not mention it. The noble Lord also asked me about the regulations and I have to tell him that the regulations are subject to negative resolution of either House.

The noble Lord, Lord Mackie of Benshie, also expressed some reservations about the order and particularly the question of local government democracy. But of course I have to remind him that national government and local government is a partnership, and national government obviously has the right to determine expenditure at the top of that partnership, because in each partnership there will be a senior and a junior partner. The local authorities are absolutely democratically elected—the noble Lord is perfectly correct—but the guidelines are laid down by the Government. If local authorities overspend and appear to be going to overspend, and that excessive expenditure, in the opinion of the Secretary of State, is endangering the whole policy which is being followed in an effort to try to recreate what we would all wish to see in this country, then of course the Secretary of State is absolutely right to take what powers he can. The powers we are discussing tonight are a development, as the noble Lord discussed of earlier Acts. We go back I think to the 1929 Act, and the 1966 Act in particular, and this order tonight is a development from powers taken in those Acts.

Lord Mackie of Benshie

My Lords, I am very glad to hear the noble Lord say that it is a partnership. The point I am trying to make is that when you treat a partner as an employee you stifle any further development and he becomes an employee. I was trying to say that that is the point at which the Government are.

Lord Gray of Contin

My Lords, I accept the point that the noble Lord has made; I obviously would not agree with him; but I realise the point he is making. I think we have had a useful debate this evening. We have discussed this order in some detail and I am grateful to noble Lords who have participated in our debate. I hope that we shall have the opportunity of many more debates in which we can exchange our views and ensure that the Scottish people know full well that in the House of Lords their interests are always well considered, and that the right decisions are ultimately taken.

On Question, Motion agreed to.